Q: Salary sacrifice deductions

Salary sacrifice arrangements provide employees with the opportunity to exchange part of their gross salary, in return for their employer's agreement to provide some form of non-cash benefit. Examples are pension schemes, childcare vouchers or cycle to work schemes. These arrangements can be financially beneficial for both the employee and the employer, as tax and NI contributions are reduced.

You can create deductions for childcare vouchers, and fixed amount salary sacrifice arrangements such as cycle to work schemes. If you want to use your software to process salary sacrifice pensions, you'll need to set these up separately. For more information, see Managing pension schemes.

See Setting up a salary sacrifice deduction.

No. You must set these up in Company > Pension Schemes. This is to ensure that the scheme is correctly set up as a pension, and that you can enter all of the contribution and provider information relating to the scheme. See Setting up a salary sacrifice pension scheme.

Your employee's pay must always exceed the threshold set out in the national minimum wage legislation. If the deductions you're setting up or processing will take the employee's pay below that limit, your software displays a warning message and will not allow you to process the deductions.

No. Statutory payments are exempt from any further deductions.

Your software takes this into account, and adjusts the amount deducted automatically to ensure that the final deduction for the salary sacrifice is correct. You'll see the adjusted deduction amount when you pay your employees using the Enter Payments option.

If the amount to be deducted exceeds the amount of pay which can be sacrificed, you can amend the value to be deducted. To do this, adjust the Hours/No or Rate value in the Enter Payments > Deductions tab.